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Why Hibbett Sports (HIBB) Stock Is Falling Today

Stocks in this article: HIBB

NEW YORK (TheStreet) -- Shares of Hibbett Sports, Inc. (HIBB) are down -8.04% to $52.52 today after the operator of sporting goods retail stores reported fiscal first quarter 2015 earnings that slid 0.6% as slightly improved same-store sales growth was offset by higher costs, and as results missed expectations, the Wall Street Journal reports.

Hibbett reported a profit of $26.2 million, below last year's $26.4 million. The per share earnings increased to $1.00 from 98 cents, the result of fewer shares outstanding in the most recent quarter.

Sales were up 3% to $240 million.

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Analysts polled by Thomson Reuters had most recently forecast earnings of $1.07 a share on revenue of $246 million.

While same-store sales were up 0.8%, they missed analysts' 2.3% growth projection.

TheStreet Ratings team rates HIBBETT SPORTS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate HIBBETT SPORTS INC (HIBB) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • HIBB's revenue growth has slightly outpaced the industry average of 4.6%. Since the same quarter one year prior, revenues slightly increased by 0.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • HIBB's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.82 is somewhat weak and could be cause for future problems.
  • 35.81% is the gross profit margin for HIBBETT SPORTS INC which we consider to be strong. Regardless of HIBB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HIBB's net profit margin of 7.74% compares favorably to the industry average.
  • HIBBETT SPORTS INC's earnings per share declined by 12.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, HIBBETT SPORTS INC reported lower earnings of $2.70 versus $2.72 in the prior year. This year, the market expects an improvement in earnings ($2.90 versus $2.70).
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Specialty Retail industry and the overall market, HIBBETT SPORTS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: HIBB Ratings Report

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